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AlJazira Bank Review

2021-07-26 06:36:42
7 pages
1795 words
University/College: 
Vanderbilt University
Type of paper: 
Critical thinking
This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Bank AlJazira (BAJ) is a business bank located in Saudi Arabia with its headquarters in Jeddah. It was formed on 21st June 1975 and incorporated on October 9, 1976, having taken over The National Bank of Pakistan (NBP) branches located in Saudi Arabia. Shareholders form the greatest part of the banks initial capital that lead to dilution of NBPs shareholding. AlJazira bank is one of the top and most developing financial organization in Saudi Arabia. It is customer-driven and service motivated institution to ensure high productivity (Bank AlJazira (BAJ)). Therefore, it is recognized as a significant Shariah compliant and a fast developing bank which facilitates overall growth through its expertise and dedicated staff who provide people, enterprises, and institutions with Shariah financial services.

Bank AlJazira introduces Takaful Taawuni, an associate that enables the institution to commit itself by self-will transact all business complying fully with the Islamic Sharia principles. It also ensures adherence to the business ethics and values in its insurance operations and to comply with the legal regulations as well as the policies outlined by the Saudi Monetary Authority(SAMA). BAJ limits itself to the code of ethics found in its Takaful Taawuni dealings all over Saudi Arabia. It is obliged to educate the leadership and employees of the Takaful division to conduct its activities in a way that is in line with the code of ethics.

Its leadership consists of a board of directors, with the chairman as the head. The current chairman of the board is Engr. Trek Othman. There exists an executive manager of the Bank, with Mr. Nabil Al Hoshan as the Chief Executive officer (CEO) and the Managing Director. Furthermore, it has acquired a lot of merits in the previous years being ranked as the best bank in Saudi Arabia.

The firm operates in the private sector and is grounded on a personal banking, treasury, corporate banking, asset management and brokerage among other services. The bank issues services such as home, current accounts, investments, credit cards and personal banking services. Besides personal banking services it also offers Islamic banking, trade finance, investment and commercial banking services (Bank AlJazira (BAJ)). The organization operates via a networking model (KHAN, 2015) entailing 80 branches and 41 Fawri Remittance Centers with 48 of its branches located in Saudi Arabia and the rest distributed worldwide. The distribution of its strategic operations was aimed at diversifying the bank's revenue stream. Remittance centers were meant to provide money transfer services. All its branches run under the governance of CEO, senior vice president and group treasurer, head of Human Capital Group, chief operating officer, head of Shariah group Head of Strategy and Business Transformation, Acting Head of Retail Banking Group and Head of Corporate & Institutional Banking. The junior management consists of Chief Financial Officer, Head of Internal Audit, Chief Risk Officer, Chief Risk Officer and the Head of Legal and Board secretary. Through their strategic business line, the firm believes that further investment will always be the main pillars for their gradual development (KHAN, 2015).

Although the bank exhibits a strong business line, it needs a more effective strategy planning process for a healthier operation. The entire paper focuses on the specific strategic recommendations meant to instill concepts and principles of a well-designed strategy process.

Strategy concepts, theories, and principles

For the strategy to be possible, possible consequences of alternate causes of action should be imagined and evaluated. However, knowledge and power cannot lead to an effective strategy but should be accompanied by knowledge of competition and the characteristic of higher order effects and alternative actions. Knowledge should reach a significant audience prior to becoming critical (Grunig & Kuhn, 2015). It should be understood that corporate strategy differs from business strategy. AlJazira should understand that its functions rely more on a business mission rather than a corporate mission. BAJs senior leadership should understand how to better compete or function in their business. To maximize its competitive advantage in the banking sector the bank AlJaziras strategy should result in a superior performance compared to other companies in the same firm. Currently, every organization operates in a complex business environment (Alshamlan, 2006). Thus Bank AlJazira should adjust necessary changes from time to time for the company to remain competitive. for the company to grow competitively, the firm should make good use of their values such that the values exceed the organization cost of creating them. The entrepreneurs should also apply the strategy of listening to their customers about the services they offer to them. They should listen to their clients feedback. Understanding that the world is evolving rapidly, the entrepreneur should be prepared to accept change and adapt the firm changes as it is expected. With this, the loss of customers in the firm will be minimal thus leading to higher profits. Bank AlJazira should use the strategies to attract and retain assets from current and existing customers.

One of the best strategies to be implemented by the organization for a successful competitive advantage is the acquisition strategy (Customer Acquisition, 2012). The acquisition strategy is a comprehensive process aimed at identifying and describing the approach to acquisition that an organizations seniors should follow to meet new program objectives (Anand & Lee, 2010). The strategy directs execution of programs over the whole life cycle. Through various elements, the organization can successfully implement the acquisition strategy. These elements include; business and contracting strategies, major contracts, incentives, technical data management, and sustainment (Angwin, 2015). The firm should address the major contracting approach that includes types of contract, source selection processes, sources and provisions, an analysis of the way competition will be promoted and sustained and leasing plans. BAJ should also explain and provide a good rationale for any contracting strategy. This can be done through justifying the cost of service delivery. The organization should also be transparent about its incentives hence motivate shareholders and potential innovators. Additionally, BAJ should identify the exact number and type of contracts, exit criteria, deliverable services, contracting plan alongside any other necessities. Besides, BAJ should be able to describe incentives in an individual contract, create a plan for the employment of the incentives to achieve their desired objectives. Finally, the strategy should also involve an overview of the contracts leading to incentives. Discussions among BAJs senior management should entail contract length, terms of service, performance measures and information covered in each agreement.

After successful implementation of the strategy, BAJ can acquire other firms that can help build on its strengths and weaknesses for a better competitive advantage. The end-result includes the better development of the business in a quicker and a more practical technique than the common organic development would entail. Since the firm is in the banking industry with no possible implementations of intermediate affiliates to look for clients, the organization has the strength of gaining more on the control of the marketing portion. The sales cycle of the organization can hence, be at par hence, building more on its business cycle (Grant & Jordan, 2015). No external payments may be required to gain better control of the process without making current customers upset but just maintain the inflow of cash (Grunig & Kuhn, 2015). However, there are risks associated with the implementation of this strategy and of which BAJ should be aware. Unless enough caution is taken, the organization can end up using more than it can make and end up in losses. However, through certain remedies such as having operative processes, the most profitable and listed client acquisition strategy may lead to enough profits and development of a good client return formula.

In the same context, customer acquisition may also be a hurdle for the firm if not looked upon in some ways (Anand & Lee, 2010). These ways may include building an engagement which makes the first-visitors be prospective clients who are fully engaged with the brand of BAJ before they request any services. To make customer acquisition possible, every organization should be able to build efficient relationships and make the first customers pain its own (Customer Acquisition, 2012). Further, the organization should be able to make informal communication with the present clients and work with an efficient marketing team to develop a good client portfolio. BAJ should also be able to evaluate ways from which values of the organization with those of the consumers can be connected to retain most of their clients successfully. Client engagement and acquisition can also be determined by the spending of the institution (Angwin, 2015). BAJ should learn how to monitor its spending and avoid taking in big groups for a scalable service delivery model but stick to spending less on that. Email marketing can also work best to align data with ongoing and future projects. BAJ should be making use of its resources mainly to start a quality plan although test various strategies aimed at lowering the prices of services. Through establishing a brand as their authority, the organization can be able to maintain client acquisition especially by educating prospects. For a successful competitive advantage, the organization should also be able to develop partnerships with the modern world no longer requires isolation as it leads to poor competition. A sustainable business model can successfully be created through the development of partnerships with other banking firms in the industry (Wills, 1997).

Similarly, clients can be acquired through technical means such as increasing search traffic with high commercial goals through ranking the best keywords for the BAJ and all the products offered by the organization. BAJ should look into creating co-branded prices that are promoted by all brands to increase the reach of the firm's contents and the resulting leads. BAJ can also find new clients through a mechanism that makes use of the current users to issue them into the final services without the intent of maintaining client acquisition cost by any projected sum. Other plans in the strategies may include inducing referrals via a referral program and building custom tools aimed at lead generation.

Strategy planning activities

For any organization to achieve its ultimate goals, whether, on a long or a short-term, a strategic plan is required (Grunig & Kuhn, 2015) and so is the case of AlJazira Bank. The strategic plans will enhance effective resource utilization and influence the decision making of the management to determine the productivity. The strategic plan will, therefore, serve as a master plan towards the achievement of the goals. The planning activities such environmental factors and SWOT analysis alongside others, if implemented, may be of great aid in achieving the goals.

Conducting environmental scans

BAJ should analyze the environmental factors affecting the institution. This includes all activities that involve an analysis of BAJ's both external and internal factors. The external environmental factors include the political, economic, and social factors. The political environment is both internal regulations in the business as well as those governing the nation. Their code of ethics and...

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